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Income Distribution and Convergence in the Transition Process

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  • Jens H lscher

Abstract

The aim of this study is to clarify, whether and where the widespread opinion that systemic change from socialism to capitalism went along with dramatically rising inequality is true and how income distribution does affect the overall growth performance of transition countries. The countries under review are: the Czech Republic, Hungary, Poland, and Russia. The findings are analyzed against the background of convergence or divergence respectively vis-à-vis the European Union (EU) level of income and income distribution. Here Germany, being the neighboring country and biggest EU economy, is taken as benchmark. For the Czech Republic, Hungary and Poland it can be shown that income distribution remained relatively stable before and throughout the transition period on the basis of so far unpublished data from the Luxemburg Income Study database. Russia however displays a sharp increase in income distribution. These results are illustrated by Lorenz curves and underpinned by developments in functional income distribution and social transfers. An attempt is made to locate these transition countries on a stylized Kuznets curve and further qualitative factors referring to growth and equality are considered.

Suggested Citation

  • Jens H lscher, 2001. "Income Distribution and Convergence in the Transition Process," LIS Working papers 275, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:275
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    References listed on IDEAS

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    1. Anthony B. Atkinson, 2000. "The Changing Distribution of Income: Evidence and Explanations," German Economic Review, Verein für Socialpolitik, vol. 1(1), pages 3-18, February.
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    Cited by:

    1. Timothy M. Smeeding, 2002. "Globalization, Inequality, and the Rich Countries of the G-20: Evidence from the Luxembourg Income Study (LIS)," Center for Policy Research Working Papers 48, Center for Policy Research, Maxwell School, Syracuse University.
    2. Maria Segana & Hubert Gabrisch, 2002. "Intra-industry Trade between European Union and Transition Economies: Does Income Distribution Matter?," LIS Working papers 297, LIS Cross-National Data Center in Luxembourg.
    3. Achim Kemmerling, 2003. "Regional Input on the Social Dimension of Ezoneplus: Belgium, The Netherlands, France, Austria, and Germany," Eastward Enlargement of the Euro-zone Working Papers wp13c, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Mar 2003.
    4. Michael Bolle & José Caétano & Jaakko Kiander & Vladimir Lavrac & Renzo Orsi & Tiiu Paas & Katarzyna Zukrowska, 2002. "The Eastward Enlargement of the Eurozone - State of the Art Report," Eastward Enlargement of the Euro-zone Working Papers wp02, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Jan 2002.

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